Rv loan rates!

wapiticountry wrote:
The “buying of toys” was an anomaly during the Covid restrictions. Many were bought with cash by people who will never miss the money. Vacation options were virtually eliminated. No cruises, no trips to Europe, no Broadway shows while eating in 5 Star restaurants and staying at the Ritz. Spending $25,000 or more for an RV didn’t stress them out, it was what they would have spent anyway. Only difference is they had something more tangible than photos and memories when their vacation ended. Some will have enjoyed the experience and add RVing to their vacation options, others will park it and never give it another thought and some will sell. None of the buyers from this demographic are going to be forced to liquidate due to financial hardship.

LOL.........
I think I ran into some of those folks when state parks here reopened after the initial Covid shutdown. A new Super C pulled into the site beside us with a couple and two 14ish year old teenagers. All piled out and immediately donned masks when they hit the great outdoors. Later that evening they sat around the campfire wearing masks, one at the 12 oclock position, one at 3, one at 6, and one at 9, all 6' apart. They would remove the masks when going into the rig. It was special. Morons.

The “buying of toys” was an anomaly during the Covid restrictions. Many were bought with cash by people who will never miss the money. Vacation options were virtually eliminated. No cruises, no trips to Europe, no Broadway shows while eating in 5 Star restaurants and staying at the Ritz. Spending $25,000 or more for an RV didn’t stress them out, it was what they would have spent anyway. Only difference is they had something more tangible than photos and memories when their vacation ended. Some will have enjoyed the experience and add RVing to their vacation options, others will park it and never give it another thought and some will sell. None of the buyers from this demographic are going to be forced to liquidate due to financial hardship.

Way too much talk about money and way too little talk about life.

First, I do not want to pay interest. I avoid it if at all possible. But I value life more than money.

Better to pay a little interest, than wait in my opinion. Kids grow up we get old. I am a fan of do it while you can.

When it comes to their toys, which includes RVs, a great many people are caught up in dreams and desires and they want what they want and are willing to pay for it.

When it comes to RVs this has several outcomes. Again, they want what they want and are willing to pay for it. That results in a typically strong market for new RVs and a relatively weak market for used RVs. That also results in a high depreciation rate. Next when buying new, desires and skillful sales reps result in many people buying more than they really need. All those amenities and current decor mean spending more and more and often getting units that are homes away from home rather than just an RV.

All those desires and dreams often end up in disappointment. Often the buyers have very limited experience and later find they are less interested than they thought. Taking the kids camping sounds great when they are younger. As they approach teenage years, forget it. The last thing they want is a vacation cooped up with the parents. Again more used RV supply.

For those willing to use some reasoning when buying there are strong lessons. First don't buy until you are sure the big expenses and commitment will be worth it. Next don't overbuy. Buy something smaller, easier to use, and less expensive. Really consider buying used. You will take advantage of that massive initial depreciation. You might get a unit where the warranty repairs have taken care of some of the shoddy construction and poor materials.

As to paying: with rising interest rates it becomes way more expensive to borrow. The idea of borrowing at low rates and investing that money is not reasonable at this time. It is easy to become overextended. Now it not the time for that. In fact those who think they can afford to borrow or to pay with cash need to really think it through. We have had a great many years with low inflation, low interest rates and a booming economy. There clearly are going to be some adjustments in the economy.

nickthehunter wrote:
To answer the question, I can write off 100% of the interest on a second home. However, that doesn't put me over the top for exceeding the standard deduction. So financing to write off the interest gains does absolutely nothing for me. That overall is probably a bad strategy. At most, if you paid $1,000 in interest in a year, it would net save you $370 in taxes (37% or less depending on Taxable Income).

But keeping my money invested and using other peoples money while only paying them 4.49% in interest is a winner. The money I kept invested is right now worth almost 70% more over the last 8 years, and that is even after it went down over 36% last year.

Now to head off the naysayers, the money is invested in a Roth IRA, total market index fund (VTSMX). I've had the fund for about 20 years, nothing fancy, moderate to above average risk. If I was going to pay cash for the RV, this is the fund the money would have come out of.

Sure, during the biggest everything bubble in the history of mankind. Even a monkey couldn't go wrong with what the FED was doing by artificially repressing interest rates and juicing asset prices. But those days are gone. Your plan won't work for anybody moving forward. In fact it will financially destroy them. Eveybody's a financial genius when the FED is printing.

Bedlam wrote:
I have never financed discretionary purchases. It takes me a while to save up, but I do not have the overhead of loans slowing my saving. Paying off our home was the real factor in being able to pre save for purchases rather than financing them into the future at a higher cost.

There are those who pay interest, and those who collect it. I like to be the latter. I haven't paid any interest for over 15 years, and don't anticipate doing it again.

Grit dog wrote:
^Which hopefully starts narrowing the competition and lowering the prices here real soon!

Hopefully in time to score a good deal on another camper for this summer…
Gonna be tough going on prices though until the unemployment rate rises.

You're not going to see any good deals on campers this year. There is still way too much money out there. $10 trillion in monetary and fiscal stimulus doesn't disappear overnight. Probably be another 18 months before we even start seeing widespread distressed sales of toys. There isn't even a sign of a recession yet. The people who are losing jobs right now can find another one immediately.

JimK-NY wrote:

valhalla360 wrote:
Operating on leverage works great until it doesn't...then it multiplies the losses. The ones talking about being savey, always gloss over this part and it would never happen to them...until it does.

The trick is to get ahead of the game. Once you have no loan payments, it's easy to save up for big ticket items.

You are certainly correct. It is possible to lose money when investing leveraged money. At the current borrowing rates and current investment returns that is highly likely.

Sadly very few people have any financial knowledge. I find it appalling that our schools do not teach anything regarding household finances. It is no surprise since the teachers are not educated in that regard. When I took out car loans and a mortgage, the rates were low and historical analysis predicted my 60:40 conservative portfolio would double my money with less than a 2% risk of falling short. Note that is falling short, not losing anything but a very small fraction of what I borrowed. That type of information is readily available with free online calculators.

Years ago I even bought a $40K truck totally with credit cards. It took a couple of cards and calls to up my borrowing limits. We paid our daughter's $30K tuition with credit cards. We paid off the cards immediately and had points for trips to Hawaii and to visit relatives on the other side of the country. As someone else pointed out, even taking a high cost RV loan can make sense it you get substantial incentives and there is no pre-payment penalty.

This is probably the wrong place to discuss financial matters including financing an RV, but if you blindly avoid all debt and pay off debts as soon as possible, it might be a good idea to gain some financial knowledge.

I think this type of forum is a great place to talk about finances. I don't think anyone is here to gloat about paying for cash because they have the means to do so and I think it's an important indicator of the health of the RV and banking industry to talk about rates, lending and cost related RV deals.

nickthehunter wrote:
To answer the question, I can write off 100% of the interest on a second home. However, that doesn't put me over the top for exceeding the standard deduction. So financing to write off the interest gains does absolutely nothing for me. That overall is probably a bad strategy. At most, if you paid $1,000 in interest in a year, it would net save you $370 in taxes (37% or less depending on Taxable Income).

But keeping my money invested and using other peoples money while only paying them 4.49% in interest is a winner. The money I kept invested is right now worth almost 70% more over the last 8 years, and that is even after it went down over 36% last year.

Now to head off the naysayers, the money is invested in a Roth IRA, total market index fund (VTSMX). I've had the fund for about 20 years, nothing fancy, moderate to above average risk. If I was going to pay cash for the RV, this is the fund the money would have come out of.

Great info! Thanks for your post.

To answer the question, I can write off 100% of the interest on a second home. However, that doesn't put me over the top for exceeding the standard deduction. So financing to write off the interest gains does absolutely nothing for me. That overall is probably a bad strategy. At most, if you paid $1,000 in interest in a year, it would net save you $370 in taxes (37% or less depending on Taxable Income).

But keeping my money invested and using other peoples money while only paying them 4.49% in interest is a winner. The money I kept invested is right now worth almost 70% more over the last 8 years, and that is even after it went down over 36% last year.

Now to head off the naysayers, the money is invested in a Roth IRA, total market index fund (VTSMX). I've had the fund for about 20 years, nothing fancy, moderate to above average risk. If I was going to pay cash for the RV, this is the fund the money would have come out of.